Myeloid malignancies are characterized by transformation in the stem cell compartment with clonal outgrowth of progeny that demonstrate considerable variability with respect to the degree of differentiation, apoptosis, and blast proliferation. Extensive experimental data implicate aberrant signal transduction as playing a fundamental role in leukemic growth. Mutant tyrosine kinases that contribute to myeloid leukemogenesis such as Flt3 and the BCR-ABL represent excellent targets for the development of molecular therapeutics. Although protein tyrosine phosphatases play an essential role in controlling kinase signaling networks, the role of these proteins in cancer pathogenesis has received limited attention. In studies supported by this project, we identified somatic mutations in the PTPN11 gene in ~35% of patients with juvenile myelomonocytic leukemia (JMML) and in ~5% of acute myeloid leukemias. PTPN11 encodes SHP-2, a non-receptor tyrosine phosphatase that relays signals from many activated growth factor receptors to Ras and other effectors. In other studies, we showed that leukemia-associated PTPN11 alleles encode gain-of-function SHP-2 proteins that induce aberrant hematopoietic progenitor colony growth. PTPN11 is thus the first human oncogene encoding a protein tyrosine phosphatase. Murine Ptpn11 mutant embryos succumb in utero with hematopoietic defects. We found that oncogenic KrasG12D does not rescue this phenotype, and unexpectedly discovered that SHP-2 phosphatase activity in not required for normal hematopoiesis. Germline PTPN11 mutations are also the predominant cause of Noonan Syndrome (NS), a common developmental disorder characterized by skeletal, cardiac, and hematologic abnormalities. Children with NS are at increased risk of developing JMML. In the course of investigating an unusual child with JMML, we unexpectedly identified germline KRAS mutations as a cause of NS. We have extensively characterized these mutant alleles, which encode amino acid substitutions not found in cancer. These observations have contributed substantially to the emerging paradigm that hyperactive Ras signaling through the Raf/MEK/ERK effector cascade plays a fundamental role in both development and cancer. We will use the additional two years of support to pursue the following research goals: (1) to perform mechanistic studies to elucidate how SHP-2 and Ras interact in hematopoiesis and myeloid growth control;and (2) to model germline KRAS mutations that cause human developmental disorders in the mouse and to use the novel strains to begin characterizing their phenotypic and biochemical consequences.